How to invest successfully using only ASX ETFs: experts

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Exchange-traded funds (ETFs) are growing in popularity as a method of investing in stocks and other assets on the ASX. The emergence of ETFs over the past decade or two has been a well-documented trend, including here at The Fool.

But there are so many ETFs out there these days, covering just about anything anyone can think of, that it can be hard to know which ones are the best for holding money.

Between index funds, commodity funds, and sector-specific ETFs, it can quickly become overwhelming to sift through the sheer number of ETFs available on the ASX.

So today, let’s take a look at just five ETFs that experts say exchange-traded funds are all you need to invest successfully.

Experts name just five ASX ETFs you need

When it comes to ASX ETFs, one of the leading experts on the subject is Chris Brycki. Brycki is the founder and CEO of investment firm Stockspot. Stockspot builds investment portfolios for its clients using only ETFs. He recently sat down with Livewire for an interview.

Brycki begins by naming five ETFs he likes to use to build his investor portfolio.

The first one is none other than Vanguard Australian Stock Index ETF (ASX:VAS). VAS is the most popular ETF on the ASX by funds under management. It is also the only ASX index ETF that tracks S&P/ASX 300 Index (ASX:XKO), than the more popular S&P/ASX 200 Index (ASX:XJO).

This is one of the reasons why Brycki likes this ETF for its exposure to Australian stocks, as well as its low fees, greater liquidity and long-term returns.

But when it comes to international stocks, Brycki prefers to go against public opinion. Currently, the two most popular international stock ETFs listed on the ASX are iShares S&P 500 ETF (ASX:IVV), and Vanguard MSCI International Shares Index ETF (ASX:VGS). But neither of these funds was Brycki’s preferred path for international stocks.

On the other hand, Stockspot prefers iShares Global 100 ETF (ASX:IOO). This fund only accommodates the 100 largest companies in the world. It hails from the US, as well as Europe, Japan, Korea and the UK. Stockspot uses IOO for liquidity and its longer listed track record. Not to mention his habit of outperforming his competitors.

Diversification with exchange-traded funds…

For access to emerging markets, iShares MSCI Emerging Markets ETF (ASX:IEM) is Stockspot’s preferred fund. This ETF houses more than 800 companies from developing countries such as China, India and Taiwan. IEM is also favored by Stockspot for its liquidity and long pattern of returns. That’s even though some of its competitors offer lower fees.

Switch to assets outside the stock market now, and we have Brycki’s preference for accessing fixed-rate bond investments. It iShares Core Composite Bond ETF (ASX:IAF) holds bonds issued by the Australian government. As well as several investment grade corporate bonds.

Stockspot chose these bonds for their exposure to fixed interest assets because of their “size, liquidity, track record, high credit quality, and relatively short duration”. Not to mention the lower cost compared to its competitors.

Stockspot’s latest ETFs cover yet another different asset class. And this time it’s gold. For this precious metal, Brycki’s choice is ETFS Physical Gold ETF (ASX:GOLD).

This ETF is backed by physical gold bullion, stored in a vault in London. Stockspot also likes the fact that it’s not protected. This means investors can benefit from the falling Australian dollar. Stockspot also appreciates the size of GOLD, as well as the fact that it has the tightest spreads on unit buying and selling.

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